ABSTRACT To successfully survive and compete within their environmental niches, microorganisms must stochastically acquire mutations or face evolutionary stagnation. Although increased mutation rates are often deleterious in multicellular organisms, hypermutation can be beneficial for microbes in the context of a strong selective pressure. To explore how hypermutation arises in nature and elucidate its consequences, we employed a recently assembled collection of 387 sequenced clinical and environmental isolates of Cryptococcus neoformans, a fungal pathogen responsible for approximately 15% of AIDS-related deaths annually. HIV-positive individuals diagnosed with cryptococcal meningitis face unacceptably high mortality rates: up to 70% in low income nations and 30% in North America. This high mortality is attributable to a dearth of antifungal treatment options, so limited because of the conserved homology between many essential fungal and human proteins, and to the high rates of resistance to antifungal drugs. Preliminary screening for the ability of each isolate to acquire resistance to otherwise lethal concentrations of diverse antifungal agents has identified 30 hypermutator strains, including two robust hypermutators. Characterization of the resistant colonies the two isolates produced revealed that insertion of a single transposable element (TE) was largely responsible for de novo drug resistance. Long- read whole genome sequencing (WGS) revealed that both hypermutator genomes encode >600 copies of this TE and harbor a nonsense mutation in the first exon of an RNAi component known to be involved in TE silencing, ZNF3. Quantitative trait loci mapping of F1 segregants from a genetic cross between one of the hypermutators and the laboratory reference strain identified a single significant peak associated with hypermutation that includes the mutant znf3 allele. Therefore, our central hypothesis is that hypermutability due to frequent transposition in these isolates is attributable to the presence of a novel, functional TE in the C. neoformans lineage as well as an RNAi defect. To determine the genetic and molecular basis of this elevated transposition and define its impact on the fitness of these strains and their ability to acquire drug resistance in host-relevant conditions, we propose two specific aims. In aim 1, genetic complementation, deletion, and reconstitution will be used to define the roles of ZNF3 and the identified TE in hypermutation. Analysis of WGS of other isolates in the collection will be conducted to identify suppressor mutations and characterize the evolutionary trajectory of the identified hypermutator alleles. In aim 2, we will determine how these increased mutation rates and transposition contribute to fitness and drug resistance in vitro through competition assays and Etests and in vivo in Galleria mellonella and murine infection models. The combination of this powerful eukaryotic model organism?s extensive history in the lab, pathogenic nature, and well-established sexual cycle along with the availability of this diverse collection of fully sequenced isolates represents a unique opportunity to determine the genetic sources of hypermutation and its phenotypic consequences.